FE@CAMPUS MASTERMIND: Response by Prerna Nagpal to question for Jan 28-Feb 3

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SummaryFE@CAMPUS MASTERMIND: QUESTION FOR JAN 28-Feb 3: The Banking Laws (Amendment) Bill, 2012, was recently passed by Parliament. Does India need new banks?

Parliament recently passed the banking law (amendment) bill 2012 which now permits RBI to assume additional regulatory powers over co-operative banks. Parliament today paved the way for corporate houses to enter the banking sector by approving the banking bill, a key reform legislation pending for long. parliament also passed the amendments to the debt recovery laws or safe law after a reply by finance minister P.Chidambarm on the combined discussion on the two bills in rajya sabha. These two bills- banking law(amendment) bill 2012 and enforcement of securlty interest and recovery of debts law amendment bill 2012, he said, we strengthen the financial sector and help in establishing large sized banks,beside promoting financial inclusion. He said,"we need 2-3 world sized banks.china has tree among the worlds top 20,we have none . We need more banks". "Banks have opened 6489 branches in 2011-2012 alone that is around 18-19 per day. we do not have the capacity to open more branch. we need banks", he said. It seeks to increase voting rights of investors in the private sector banks to 26% from the existing 10%. The Lok Sabha has already passed these two bills. Chidambaram said the amendment was not intended to give banking licences to big corporate houses alone, but also to allow eligible public sector entities to enter the sector. The Banking Bill was approved by the lower house earlier this week after the government dropped the controversial clause concerning allowing banks to trade in commodity / futures referring to today’s strike by Bank union against reforms, P. Chidambaram said he could only request the bank employees to refrain from such activites. Yes, India needs more Banks.

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